Annuitizing refers to which action?

• A. Changing payout options within the accumulation stage
• B. Converting from the accumulation stage to the distribution stage
• C. Liquidating the contract completely before payout
• D. Deferring payments to a later date

Answer: (B)

Annuitizing is the move from growing money in the accumulation phase to taking a steady income in the distribution phase. When you annuitize, the contract converts the accumulated value into a guaranteed stream of periodic payments, often based on options like a lifetime or fixed period. It’s about starting income payments rather than changing payout methods within accumulation, withdrawing all funds, or simply delaying payments. This is why converting from the accumulation stage to the distribution stage is the best description of annuitizing.